Synthomer Dividends - SYNT

Synthomer Dividends - SYNT

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Stock Name Stock Symbol Market Stock Type
Synthomer Plc SYNT London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
-9.60 -5.9% 153.10 16:35:07
Open Price Low Price High Price Close Price Previous Close
162.00 148.70 162.90 153.10 162.70
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Synthomer SYNT Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

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Posted at 22/9/2022 17:22 by fuji99
This not specific to SYNT at all. IMO the main reason is that we are swimming in a bear market for the last few months. 80% of stocks are doing new lows every day. So as long as the FED and the BoE keep raising rates and the Russia/Ukraine conflict is going on the markets are moving in a dark tunnel without any direction. I am 80% in cash and 20% in dividend stocks. This Christmas may be the most horrible to the retail world and to the markets as a whole as the real effects of inflation will be out in force. I cannot see how the markets/stocks will rise if inflation is high and interest rates are increasing. From where growth will come from if it is becoming more expensive to borrow money for investment ? So high inflation + high interest rates + Russia/Ukraine conflict (possibly Taiwan/China coming) = No growth = Bear market. This is my own opinion.
Posted at 16/9/2022 10:36 by brucie5
Edmundshaw, what you say is fairly indisputable - it could go either way! But this epitomises the dilemma that many value+income investors are facing currently, in holding/buying what they consider to be solid companies yielding great free cash flow, only to see the face value of the shares getting trashed. One way of looking at it might be to ask what you would do if SYNT was an IT - would you have the confidence to buy down the cycle into the abyss, knowing that the collective risk of the vehicle would prevent complete loss of capital? My answer? Probably - I would certainly feel much MORE confident in doing so, while seeking to hold some capital back for the absolute nadir - if that's possible to time. Added to which is the precondition of any share being held in such an IT: is it producing a sustainable market busting dividend, as far as one can tell? Added to which, are others, with similar investing priorities seeing value in these shares at these levels? Think directors, pension companies... Added to which: are you able to capitalise on the decline in the share price to buy down and increase your dividend average? And finally, step back a moment: this is not of course an IT, it is a single share. So, of course one needs to ask oneself, is this the only share in your folio, whose complete value destruction would mean capital wipeout? So I hold onto these. And unless the story changes, like GMPF, I will in due course be adding.
Posted at 07/8/2022 16:47 by jonwig
This is the IC tip, from Friday (at 211p): Synthomer (SYNT) is an example of how short-sighted the stock market can be. Demand for PPE during the pandemic turbo-charged performance elastomers (PE) sales. Synthomer's share price almost doubled. Now PE sales are back to pre-pandemic levels, the share price has almost halved, so we are back to where we started. The difference between now and before the pandemic is inflation. The cash profit (Ebitda) margin dropped from 26.2 per cent to 13.0 per cent. The need to stockpile raw materials to mitigate against supply chain disruption has also tied up more working capital in the business. Free cash has therefore swung from an inflow of £89.5mn last year to an outflow of £62mn. The combination of the cash outflow and the £759mn acquisition of Eastman’s Adhesive Resins means net debt has risen to £993mn from £355mn. This acquisition enabled the business to launch a new Adhesive Technology division that generated £131mn of revenue last year. This will diversify the business, and Synthomer insists that adhesives is a higher growth segment. If the investment in Adhesive Technology is a success, then the business will be a better place leaving the pandemic than going in. Cash profit of £173mn is 74 per cent higher than the same period in 2019. The fact the share price sits around half its 2019 level is rather indicative of the global economic slowdown and Synthomer's increased debt. FactSet consensus expects earnings to rise to 39p in 2023 which gives a very affordable 2023 PE ratio of five. Earnings aren’t going to race forward, but at these prices there looks to be value here. Buy. I don't hold, but the share price seems weird!
Posted at 05/8/2022 17:53 by justiceforthemany
Always good to see directors buying and having skin in the game. Tipped by investors chronicle as a buy post results and given the revised forward P/E is just 5 and dividend yield 6% with a manageable debt to equity of 2 you can see why. Full year dividend of 12p means 26p of earnings can be used to pay down debt.
Posted at 04/7/2022 10:45 by montyhedge
So what roughly is dividend yield at say 224p, 5% - 6%.The 21.3p dividend they paid I think should have been called Final and Special dividend.
Posted at 30/6/2022 09:26 by al101uk
RCTurner2, I don't think debt is a problem, but the deal was completed post results. So you have to add the debt from the acquisition. Interest on current debt stands at around 4%. 4% on £250 million borrowed (educated guess) will reduce dividend payments for a while. I didn't calculate this in my original over-blown dividend expectation, so while my revenue, EBITDA and Operating Profits were around broker levels, my estimate of dividend yield was spectacularly out :-)
Posted at 13/5/2022 00:22 by al101uk
Sorry i've been tying myself in knots here... but finally figured it out... The company states this about it's dividend payments: "The Board maintains a dividend policy of 2.5 times earnings cover." Looking at broker forecasts: hxxps:// Consensus is for a 20% dip in profits, but a dividend cut that is completely out of proportiion with that numbers, closer to 50%. This years earnings were 48p and they paid a dividend of 30p. The cover for this year was only 1.6x, not 2.5x So at consensus earnings of 42.5p and adjusting the dividend to 2.5x we end up with a large cut in dividend. 48 / 1.6 = 30p 42.5 / 2.5 = 17p The question is, why did the company pay a dividend that does not conform to their dividend policy. The answer lies in a second statement regarding dividends in the results: "The total dividend for the year is in line with the Group’s dividend policy with the dividend representing 40% of the underlying earnings per share" "Underlying" is the key term here. This years underlying EPS is 75.2p and DOES cover this years dividend 2.5x. 75 / 2.5= 30p The brokers have used the wrong earnings number to calculate the forecast yield. Assuming a 20% fall in underlying earnings per share (which isn't a given by any means) you get a Dividend yield of around 24p. Underlying could obviously move in either direction in relation to EPS depending on how extrodinary one off costs were last year and how they relate to next results. I'm reasonably confident that all things being equal any dividend cut will be a relatively a small one.
Posted at 12/5/2022 21:09 by al101uk
Seems to be constant discussion around the level of dividend paid and the one off increase in revenues due to Covid booked last year. thought I'd take a look and see if I can made any sense of it all. The one off growth happened in the Performance Elastomers division. There's no breakdown of the specific Nitrile latex revenue, but lets (for the sake of argument) assume that all growth in that division was one off growth. That's definitely not true, but let's assume that anyway. Revenue in that division was up by £271 million, EBITDA was up by £91 million and Operating profit was up by £84 million. Those numbers account for 11% of group revenue, 17% of group EBITDA and 19% of group Operating profit. The company has stated that all areas of the business grew and some grew against Covid headwinds. It seems unlikely to me that the company will shrink (excluding the one off gains from last year), so the 19% can probably be shrunk somewhat through organic growth.The company make enough noises about future growth in there different divsion to make this a reasonable assumption. Again the entire 19% is not attributable to Nitrile Latex and there is some organic growth in Nitrile Latex in any case as supported by this from the results: "Putting aside the exceptional demand created by the pandemic, we intend to continue investing in Nitrile latex because we, along with other industry experts, expect the underlying growth in demand for Nitrile latex experienced pre-pandemic to continue." We also have to look at what the extra cash was used for: "Looking ahead The exceptional performance in 2021 has enabled the Group to deleverage quickly and has paved the way for the $1 billion acquisition of Eastman’s Adhesive Resins business," So what does a $1 billion acquisition bring to the table... well, according to Synthomer "Its portfolio takes us into more specialised, more global and higher growth segments." More specialised generally means higher margin, but can we find out in monetary terms, what we have bought? According to Eastmans "The total sale price represents a multiple of 11 times trailing twelve-month adjusted EBITDA of the adhesives resins business." So lets take the $1 billion and divide by 11 to get a number for EBITDA... that's $90 milion... versus the maximum EBITDA we gained as a one off of £91 million. In conclusion, debt is likely to have increased, but the business will have grown organically and has bought an additional $90 million of EBITDA while losing a maximum £91 million in one off gains. I'm not sure what all of this does for the dividend and the business is in a volatile market, but they seem to have more than replaced the lost EBITDA. A dividend cut might still be on the cards, I think they will cut, but the severity of the cut doesn't necasarily have to be as extremne as some here suggest.
Posted at 11/5/2022 18:08 by turvart
Hi spangle93, You ask my opinion on what you call the "disconnect". This is my opinion: In last years 2021 results SYNT have exceptional results across the board of products, however they had a fantastic uplift in latex glove sales up 136% due to covid 19 sales and they state in the results that sales should go back to 2019 levels before the pandemic. So what we have had IMO is the share price well over £5 due to these latex sales and massive emphasis have been put on these latex sales rather than people actually spending time to read the accounts and see that the whole range of products was actually up by a very good margin also. Another reason also is the fact again that some people don't understand how to read accounts and feel that SYNT are massively in debt because of the Eastman's Resin acquisition, quite simply it's not, they used their profit, had a share placing and used a 300 Mln credit facility to finance it of which they did comfortable and if people understand accounts will realise that after the takeover SYNT current assets are far higher than current liabilities. Another area is that people are second guessing and sticking their finger in the air stating that the dividend is going to be cut, this is another area that I strongly disagree and I feel the dividend will actually be higher based on my projection that EPS figures will be higher due to the recent acquistions and the BOD state that 40% of EPS will be paid minimum in dividends. Fortunately for me I do fully understand how to read accounts and I have been investing for well over 21 years and know a good stock when I see one and SYNT will deliver the EPS and this is what does the real talking in fundamentals. I hope this helps. Regards, Turvart.
Posted at 30/3/2022 18:27 by tole second share I would consider is aqueous polymers specialist Synthomer (LSE: SYNT). The company's latest annual dividend means that it is currently offering an eye-watering yield of 9.8%. The 30p per share dividend was comfortably covered by basic earnings per share that came in at 75.2p.With its strong position in an important part of many commercial production chains, Synthomer has been doing well thanks to strong demand. I am concerned, though, that cost inflation could damage profit margins over the next couple of years. Additionally, Nitrile latex demand is now subdued after previous stockpiling of items such as medical gloves. That could lead to revenues falling.Shares to buy now for my portfolioBut I see such ups and downs of the demand cycle as an inevitable part of life for a basic materials producer like Synthomer. In the long term I expect demand for its products to remain substantial. That should help support profits.The dividend jump last year reflected a pandemic-era demand surge. So I do not expect such a high payout in future. The company called the dividend raise an "exceptional increase reflecting the unique year of profitability". But I still hope the company can still pay attractive dividends in future, even if at a lower level.The price-to-earnings ratio is currently around seven. That valuation looks cheap to me, although if earnings fall next year the prospective P/E ratio would be higher. From a buy and hold perspective, I would be happy to add these shares to my portfolio.
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